Remember when an S&P 500 company's value topping $1 trillion was a big thing? Get ready for this: The AI boom has already added three-times that much money into investors' pockets this year.
And it's been a boon for investors in the right place. Roughly a third of all the money gained on U.S.-listed AI stocks in the Roundhill Generative AI ETF this year showered on the top five holders of the stocks to the tune of nearly $1 trillion, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence. And that includes some people that aren't household names, yet.
You can thank the AI "gold rush" for the bonanza for lucky investors, says Dan Ives of Wedbush Securities. And it's just getting started.
"Coming into 2023 the sentiment around tech stocks was extremely negative," he said. "Tech stocks have done the exact opposite in the first half of 2023 and been very strong, led by megacap tech leadership as AI has changed the tech world and investor sentiment, with this transformational technology an 'Internet Moment.' "
Winners In The $3 Trillion Rally
It's easy to understand the AI enthusiasm with investors. Less than 50 investors, including some of the most powerful ETF providers, are up $927.6 billion this year on their top-five positions in AI stocks — just shy of the $1 trillion mark.
That's impressive as the 26 U.S.-listed stocks in the Roundhill AI ETF as a group gained $3 trillion in value this year. And some of the big gains are pushing new names further into the ranks of billionaires or near billionaires.
Take Andreas Bechtolsheim, co-founder and chairman of cloud computing firm Arista Networks as a case in point. The value of Bechtolsheim's 45.9 million shares, or 14.9% of the company, gained more than $1.3 billion just this year. That's because the stock rose more than 23% just this year. His stake in the company is now worth $6.8 billion.
There's also Charles Liang, founder of high powered computer maker: Super Micro Computer. He's now a billionaire with his 539,841 shares in the company that gained more than 160% this year. Those shares are worth $725 billion more now than last year.
And they're far from being alone enjoying the spoils of AI.
Other Big S&P 500 AI Winners
AI, like many gold rushes, benefits those who showed up early.
C3.ai is the biggest percentage winner of stocks in the Roundhill AI ETF this year. Shares are up more than 191% this year. And that's been a big win for top holder and founder Thomas Siebel, who's also the largest investor in the company. He owns 9.4 million shares now worth roughly $315 million. And that's a gain this year alone of more than $200 million.
Some familiar names, too, are at ground zero in the AI boom. Oracle founder Larry Ellison gained $41 billion this year on the shares caught up in the AI frenzy. His stake is now worth $134.7 billion. Shares of Oracle are up 43% this year. That's just one of the S&P 500 stocks he's loaded up on.
Meta's Mark Zuckerberg gained even more: $55.4 billion. The company is putting more resources in helping companies and programmers make AI systems that require less costly "training." Meta stock is up 132% this year, flowing right to Zuckerberg's portfolio.
Artificial Intelligence And AI News To Watch
Own The S&P 500? You're Part Of AI Boom, Too
But don't feel too bad if you didn't found an AI company or invest in one early. Odds are if you're invested in S&P 500 ETFs that own AI stocks, you're taking part too.
Vanguard alone is up $242 billion this year on its top five positions on U.S.-listed stocks in the Roundhill AI ETF. It's a top owner of a number of stocks in the ETF including Nvidia plus smaller players like Super Micro Computer and ServiceNow.
ETF competitors BlackRock and State Street Global Advisors are right behind Vanguard in terms of AI gains.
"While bears will continue to fret about tech valuations and the uncertain macro backdrop, we believe this ultimately is the start of a new tech bull market we see heading into 2024 being driven by this AI revolution coupled with a stabilizing IT spending environment," Ives said.
Select Winners Among Top Five Owners Of AI Stocks
| Rank | AI Investor | Sum of gain this year ($ billions) |
|---|---|---|
| 1 | Vanguard Group (various) | $242.9 |
| 2 | BlackRock (various) | $206.9 |
| 3 | State Street Global Advisors (various) | $94.8 |
| 4 | Fidelity (various) | $76.0 |
| 5 | Capital Research and Management (various) | $60.8 |
| 6 | Zuckerberg, Mark Elliot (Meta) | $55.4 |
| 7 | Bezos, Jeffrey P. (Amazon.com) | $43.5 |
| 8 | Ellison, Lawrence J. (Oracle) | $41.0 |
| 9 | Page, Lawrence Edward (Alphabet) | $23.5 |
| 10 | Huang, Jen-Hsun (Nvidia) | $22.4 |
| 12 | Scott, MacKenzie (Amazon.com) | $11.6 |
| 18 | Bechtolsheim, Andreas B. (Arista) | $1.3 |
| 19 | Thiel, Peter Andreas (Palantir) | $1.1 |
| 20 | Liang, Charles (Super Micro Computer) | $0.7 |
| 34 | Siebel, Thomas M. (C3.ai) | $0.2 |
Sources: Roundhill Generative AI ETF, IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
